M/s. Patram Lease Holder, Faridabad V. ITO, Faridabad

CO 4/DEL/2012

• Counselvise Citation: [2014] 123 COUNSELVISE.COM (IT) 0154 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 22 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-12-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 28-08-2014
• Assessment Year: 1997-1998
• Appeal Filed On: 17-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR CHOPRA
• Assessee Lawyers: VIVEK SH SURESH ARORA; HARISH MANGLA ADVS
• Keywords: Rejection of books of accounts
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI B. C. MEENA, ACCOUNTANT MEMBER AND SHRI C. M. GARG, JUDICIAL MEMBER C.O. NO. 4/DEL/2012 (IN I.T.A .NO. - 2134 /DEL/201 1 ) (ASSESSMENT YEAR - 1997 - 98) M/S PATRAM LEASE HOLDER VS. ITO, VILLAGE MANGER, WARD - II(4), FARIDABAD. FARIDABAD. PAN:AAIFP1647A (APPELLANT) (RESPONDENT) REVENUE BY: - SH. MANOJ KUMAR CHOPRA, SR. DR ASSESSEE BY: - SH. VIVEK, SH. SURESH ARORA, & SH. HARISH MANGLA, ADVS. ORDER PER C. M. GARG, JM. THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF CIT (APPEALS) - FARIDABAD , VIDE DATED 28 .0 1.2011 IN APPEAL NO.2 71 / 2009 - 1 0 FOR THE ASSESSMENT YEAR 1997 - 98 . 2. THE ASSESSEE HAS RAISED FOLLOWING SOLE GROUND READS THUS: - ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS NOT JUS TIFIED IN UPHOLDING THE FINDING OF THE AO REGARDING REJECTION OF THE BOOKS OF ACCOUNTS OF THE ASSESSEE. 3. ON PERUSAL OF THE RECORD OF THE ITA NO. 2134/DEL/2011 OF THE REVENUE , WE NOTE THAT THE PRESENT APPEAL BY THE ASSESSEE WAS ALSO HEARD ALONG WITH ITA NO. 2134/DEL/2011 OF THE REVENUE ON 28/08/2014 AND THE APPEAL OF THE REVENUE WAS ADJUDICATED AND DISMISSED VIDE THE ORDER DATED 31/10/2014 BUT NO ORDER WAS PASSED FOR THE PRESEN T APPEAL OF THE ASSESSEE 2 WHICH IS A MISTAKE APPARENT ON THE RECORD. HENCE, WE FIND IT JUST AND PROPER TO PROCEED TO RECTIFY THE MISTAKE U/S 254(2) OF THE ACT. ACCORDINGLY, WE ARE DISPOSING THE PRESENT APPEAL OF THE ASSESSEE BY PASSING THIS ORDER. 4. IN TH E SOLE GROUND THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER WHEREIN THE LD. CIT(A) UPHOLD AND CONFIRMED THE ACTION OF THE AO REGARDING REJECTION OF THE BOOKS OF ACCOUNTS OF THE ASSESSEE. FROM BARE READING OF PARA 6.6 AT PAGE 20 OF THE IMPUGNED ORDER OF TH E LD. CIT(A). WE NOT THAT THE ACTION OF THE AO REJECTING BOOKS OF ACCOUNTS OF THE ASSESSEE WAS UPHELD BY THE LD. CIT(A) WITH FOLLOWING CONCLUSION: 6.6 IN GROUND NO. 4 OF THE APPEAL, THE APPELLANT HAS CHALLENGED THE ACTION OF THE AO IN REJECTING THE BOOKS OF ACCOUNTS AND INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT. IN THE FACTS OF THE APPELLANT S CASE AS DISCUSSED IN PARA 6.1 ABOVE, THE AO HAS REJECTED THE BOOKS OF ACCOUNTS AFTER DETECTING SEVERAL DISCREPANCIES IN THE DOCUMENTS PRODUCED BEFORE HIM AS WELL AS FOR THE REASON THAT NO COMPLETE BILLS / VOUCHERS WERE PRODUCED WHICH PREVENTED HIM TO EXAMINE THE CORRECTNESS OF INCOME DECLARED BY THE APPELLANT. IN VIEW OF THESE DISCREPANCIES AND FAILURE OF APPELLANT TO FURNISH THE REQUIRED EVIDENCES, THE AO CAME TO THE CONCLUSION THAT THE BOOKS OF ACCOUNTS OF THE ASSESSEE DID NOT REFLECT TRUE PROFITS. THE HON BLE SUPREME COURT IN THE CASE OF BRITISH PAINTS INDIA LTD. (188 ITR 44) HAS HELD THAT SECTION 145 OF THE ACT CONFERS SUFFICIENT POWER UPON THE AO TO MA KE SUCH COMPUTATION IN SUCH MANNER AS HE DETERMINES FOR DEDUCING THE CORRECT PROFITS AND GAINS. IT IS NOT ONLY THE RIGHT BUT THE DUTY OF THE ASSESSING OFFICER TO CONSIDER WHETHER OR NOT THE BOOKS DISCLOSE THE TRUE STATE OF ACCOUNTS AND THE CORRECT INCOME 3 C AN BE DEDUCED THEREFROM. IN THE FACTS OF THE APPELLANT S CASE, I HOLD THAT THE AO WAS WELL WITHIN HIS JURISDICTION TO INVOKE THE PROVISIONS OF SECTION 145(3) OF THE ACT. THE ACTION OF AO IS ACCORDINGLY CONFIRMED AND THIS GROUND OF APPEAL TAKEN UP BY THE AP PELLANT IS REJECTED. 5. SINCE IN OUR ORDER VIDE DATED 31/10/2014 PASSED IN ITA NO. 2134/DEL/2011 OF THE REVENUE, WE HAVE HELD THAT THE AO RIGHTLY PROCEEDED TO REJECT BOOKS OF ACCOUNTS OF THE ASSESSEE U/S 145(3) OF THE ACT AND THE LD. CIT(A) PROCEEDED TO ESTIMATE THE INCOME OF THE ASSESSEE BY TAKING G.P. RATE OF A.Y. 1996 - 97 WHICH WAS ACCEPTED BY THE DEPARTMENT. THUS, IN VIEW OF ABOVE, WE ARE INCLINED TO HOLD THAT THE SOLE GROUND OF THE ASSESSEE BECOME INFRUCTUOUS AND DESERVES TO BE DISMISSED, AND WE DISMISS THE SAME. ORDER PRONOUNCED IN THE OPEN COURT ON 08 /12/2014. SD/ - SD - ( B. C. MEENA ) (C. M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED/ 08/ 12/2014 *AK VERMA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR